Correlation Between Titan Machinery and Sun Country

Can any of the company-specific risk be diversified away by investing in both Titan Machinery and Sun Country at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Titan Machinery and Sun Country into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Titan Machinery and Sun Country Airlines, you can compare the effects of market volatilities on Titan Machinery and Sun Country and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Titan Machinery with a short position of Sun Country. Check out your portfolio center. Please also check ongoing floating volatility patterns of Titan Machinery and Sun Country.

Diversification Opportunities for Titan Machinery and Sun Country

0.71

Correlation Coefficient

Titan Machinery  Sun Country

Poor diversification

The 3 months correlation between Titan and Sun is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Titan Machinery and Sun Country Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Country Airlines and Titan Machinery is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Titan Machinery are associated (or correlated) with Sun Country. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Country Airlines has no effect on the direction of Titan Machinery i.e., Titan Machinery and Sun Country go up and down completely randomly.

Pair Corralation between Titan Machinery and Sun Country

Given the investment horizon of 90 days Titan Machinery is expected to under-perform the Sun Country. In addition to that, Titan Machinery is 1.15 times more volatile than Sun Country Airlines. It trades about -0.19 of its total potential returns per unit of risk. Sun Country Airlines is currently generating about -0.1 per unit of volatility. If you would invest  1,662  in Sun Country Airlines on December 5, 2024 and sell it today you would lose (118.00) from holding Sun Country Airlines or give up 7.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Titan Machinery  vs.  Sun Country Airlines

Titan Machinery

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Titan Machinery are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Titan Machinery is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Sun Country Airlines

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Country Airlines are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental indicators, Sun Country may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Titan Machinery and Sun Country

The main advantage of trading using opposite Titan Machinery and Sun Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Titan Machinery position performs unexpectedly, Sun Country can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sun Country will offset losses from the drop in Sun Country's long position.

The idea behind Titan Machinery and Sun Country Airlines pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.